At a press conference at the San Francisco Unified School District office in San Francisco, Calif, held on Thursday, August 14, 2008, Superintendent Carlos Garcia announces that SFUSD did well in the annual California Standards Test for the seventh year in a row.

An economic stimulus package working its way through Congress could provide $10 billion in federal relief over the next two years for California's public schools, raising optimism among educators that it might ease cutbacks caused by the state's budget crisis.

The money is part of an $825 billion stimulus package the House of Representatives is expected to vote on today. It contains about $140 billion for schools nationwide.

The package would provide millions of dollars to most school districts in the Bay Area and across the state for construction, special education and help for low-income students.

Although no package has been approved, California educators are salivating over what could be the largest infusion of one-time federal cash for schools in the state's history.

To put it in context, in 2007, the federal government spent $54 billion on education nationwide, an amount dwarfed by the $140 billion in the stimulus bill. California's share would be about $10 billion - more than $1 billion of it for the huge Los Angeles Unified School District.

The Senate is expected to take up its version of a stimulus package next week, and a compromise is likely to be approved by both houses in mid-February.

Wells is among several California educators - school board members, principals, parents and teachers - who have lobbied Washington since before President Obama took office.

"We wanted to make sure they were aware of just how deep the proposed cuts are in California," Wells said.

Keeping the money local

And they asked for language in the bill that would ensure schools could keep the new federal money rather than allow the state to siphon the money away by reducing its school funding by the same amount.

It's a danger that Gov. Arnold Schwarzenegger's spokesman, H.D. Palmer, acknowledges could happen - at least to some extent - unless the federal money were specifically earmarked for certain purposes.

California is facing a $42 billion budget gap over the next 18 months, and state lawmakers have yet to agree on how to close it. With the state on the brink of running out of cash, California hopes to borrow money to keep short-term cash flowing, Palmer said.

But if money came in from the stimulus package "with no strings attached," he said, "our priority would be to use the money to reduce or eliminate that borrowing."

Under the House plan, the education stimulus money is largely earmarked. That might protect much of the cash from California lawmakers who want to use it to pay down debt, but it also restricts local educators from using it as they see fit - say, to retain teachers.

San Francisco is a case in point. The district would directly receive nearly $42 million over the next two years under the stimulus plan being voted on in the House. But the money is earmarked for special education, school construction and schools with low-income children.

"We're still going to have to put out layoff notices," said Superintendent Carlos Garcia, noting that the state's legal deadline for mailing out such notices each year is March 15. The notices can be rescinded later if the fiscal picture improves. But Garcia said that as of now, with no state budget and no certainty in how any incoming money might be spent, the notices are going out.

Schwarzenegger proposes to help close the budget gap by withholding about $5.2 billion from schools over two years. An additional $7 billion also could be lost to schools through an accounting procedure that the governor hopes to impose.

This is forcing schools to prepare for extensive teacher layoffs, ballooning class sizes and even the chance of a shorter school year

But the proposed $10 billion in federal funds is earmarked for specific purposes and is unlikely to prevent all the dire steps being planned.

San Francisco again provides an example. The district has to spend $31 million from its general fund to pay for special education costs that the federal government requires but does not fund. Under the stimulus package, the district would receive an additional $6.5 million specifically for special education.

"Obviously, this will help us," Garcia said. "But we have to look at this as one-time money."

"While we aren't out of the woods yet, the federal stimulus package is a promising leap in the right direction," Torlakson said. "It provides hope that our schools will be spared the worst of budget cuts that threaten the future of our children and our economy."